Re Doray Minerals Ltd; [No 2] - [2019] WASC 99

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE DORAY MINERALS LTD; EX PARTE DORAY MINERALS LTD [No 2] [2019] WASC 99
CORAM:   VAUGHAN J
HEARD:   28 MARCH 2019
DELIVERED          :   28 MARCH 2019
FILE NO/S:   COR 21 of 2019

EX PARTE
DORAY MINERALS LTD
Plaintiff

Catchwords:

Corporations law - Schemes of arrangement - Proposed merger acquisition - Share scheme - Option scheme - Application for orders approving schemes under s 411(b) of the Corporations Act 2001 (Cth)

Legislation:

Corporations Act 2001 (Cth), s 411, s 412

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

A J Papamatheos

Solicitors:

Plaintiff

Bellanhouse

Case(s) referred to in decision(s):

Re Doray Minerals Ltd; Ex parte Doray Minerals Ltd [2019] WASC 57
Re Tawana Resources NL (No 3) [2018] FCA 1952
Re Tawana Resources NL [2018] FCA 1456
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd [No 2] [2018] WASC 357

VAUGHAN J:

Overview

On 15 February 2019 I made orders pursuant to s 411(1) of the Corporations Act 2001 (Cth) to convene meetings of the ordinary shareholders and certain option holders in Doray Minerals Ltd (Doray). The meetings were convened to consider two proposed schemes of arrangement - a share scheme and an option scheme. I also made orders approving distribution of a scheme booklet.
The proposed share scheme provides for Silver Lake Resources Ltd (Silver Lake) to acquire all of the ordinary shares in Doray for a scheme consideration of 0.6772 of a new Silver Lake share for each Doray share. The option scheme is as to options exercisable at 40 cents on or before 30 January 2020. It provides for Silver Lake to acquire those options for a scheme consideration of $0.0781 cash for each Doray option.
The two scheme meetings were held on 22 March 2019. At the share scheme meeting Doray's members approved the scheme of arrangement by 99.19% of votes cast and 96.29% of members present in person or by proxy. At the option scheme meeting Doray's relevant option holders approved the scheme of arrangement unanimously, ie by 100% of the votes cast and all of the relevant option holders present in person or by proxy.
This morning application was made pursuant to s 411(4)(b) of the Act for orders approving the two schemes. I made orders approving the two proposed schemes of arrangement. These are my reasons for those orders.

Background and additional evidence

Incorporation of earlier reasons

I gave reasons for my 15 February 2018 orders in Re Doray Minerals Ltd; Ex parte Doray Minerals Ltd.[1]
[1] Re Doray Minerals Ltd; Ex parte Doray Minerals Ltd [2019] WASC 57.
I do not intend to repeat what was said in those reasons. These reasons should be read with and as if they incorporated the earlier reasons. In particular, I rely on what was stated in the earlier reasons as to:
(1)the relevant entities, Doray and Silver Lake ([8] to [10]);
(2)the announcement of the acquisition proposal ([11] to [14]);
(3)the nature…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] WASC 99
Decision Date: 28 MARCH 2019

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Re Doray Minerals Ltd; [No 2] involved a dispute concerning a proposed merger and acquisition. The applicant, Doray Minerals Ltd, sought orders approving schemes of arrangement involving a share scheme and an option scheme to facilitate the acquisition of Doray by another company. The application was made under section 411(b) of the Corporations Act 2001 (Cth).

The central legal issue before the court was whether the proposed schemes were fair and reasonable to the relevant stakeholders, particularly the minority shareholders of Doray. The court had to consider the fairness of the proposed schemes, including the adequacy of the valuation process and the information provided to shareholders. Additionally, the court had to ensure that the schemes complied with the statutory requirements of the Corporations Act.

The court examined the valuation reports and the process by which they were conducted, assessing whether the minority shareholders were provided with sufficient information to make an informed decision. The court also considered the fairness of the terms of the schemes, including the exchange ratio for the share scheme and the terms of the option scheme. After thorough consideration, the court determined that the schemes were fair and reasonable to the minority shareholders and approved the application, granting the necessary orders under section 411(b) of the Corporations Act.

Orders